Tuesday, March 22, 2011

20110322 0941 Global Ecomomic Related News.

E.U: ECB officials signal April interest rate increase still likely. ECB officials indicated the economic uncertainty caused by Japan's earthquake may not deter them from raising interest rates next month. ECB Executive Board member Gertrude Tumpel-Gugerell and Governing Council member Yves Mersch both said that "strong vigilance" is necessary to keep a lid on inflation, a phrase the central bank uses to signal a rate increase is imminent. (Source: Bloomberg)

India: Money-market rates are climbing to their highest level in a year on speculation money supply will tighten after the central bank signaled Asia's most aggressive pace of interest-rate increases will continue. The overnight call-money rate advanced 58 basis points, or 0.58 percentage point, the biggest increase since November, to 7.58% last week, according to data compiled by Bloomberg. Banks borrowed INR1.3tr (USD29b) on average every day from the Reserve Bank of India last week, the most this year, to meet fund shortages. (Source: Bloomberg)     

Thailand: Economy has momentum, according to Prime Minister
Thailand’s economy shows ample signs of growth and has fiscal room to counter uncertainties, Prime Minister Abhisit Vejjajiva said following Japan’s earthquake and a rise in global oil prices. He said that export and revenue collection data from January and February suggest there is plenty of momentum for future growth, and that low public debt means the government has “flexibility” to adopt fiscal measures if uncertainties arise. Abhisit has pledged to increase the minimum wage by 25% over two years and intends to boost civil service pay. (Bloomberg)

Indonesia: Central bank ‘isn’t worried’ about March to May inflation
Indonesia’s central bank said it isn’t concerned about inflation in March, April and May as pressure on prices eases, signaling it has the scope to extend a pause in raising interest rates. The central bank “isn’t worried” and prices in March may fall because of the harvest season, without further elaboration. Consumer-price growth in February slowed to 6.84% compared with 7.02% in January, allowing Bank Indonesia to avoid raising rates this month even as neighbours from Thailand to India tightened policy to fight inflation. (Bloomberg)

Japan: Quake rebuilding may take five years, according to World Bank
The World Bank says it may take five years for Japan to rebuild after this month’s 9.0-magnitude earthquake and tsunami, which killed at least 8,450 and destroyed thousands of buildings. Taking history as a guide, the World Bank says GDP growth will be negatively affected through mid-2011, after which growth should pick up in subsequent quarters as reconstruction efforts, which could last five years, accelerate. The World Bank cited private estimates for the damage wrought that range from USD122bn to USD235bn. (Bloomberg)

US: Sales of existing houses fall
Sales of previously owned US homes dropped more than forecast in February, sending prices to the lowest level since 2002 and indicating the market is struggling to recover. Purchases decreased 9.6% to a 4.88m annual rate, less than the 5.13m median forecast. The median price fell 5.2% y-o-y. Distressed properties accounted for 39% of sales, and the share of all cash transactions was 33%. Sales fell in all regions in February, led by a 12% drop in the Midwest and a 10% decrease in the South. The median price decreased to USD156,100 last month from USD164,600 in February 2010. The number of previously owned homes on the market rose 3.5% to 3.49m from January. (Bloomberg)

20110322 0940 Malaysia Corporate Related News.

KLCI chart reading :
correction range bound little downside biased with MACD indicator +ve crossed up.

Action plan on Johor Corp’s debts
Top officials at Johor Corp are planning to meet soon to decide on the best plan of action on how to deal with its debt issues. “Among the plans are to get an independent view on pending deals, its assets and liabilities and to help it decide on the best way forward,” a banking source explained. (StarBiz)

AMMB: ANZ may raise stake in AMMB. Australia and New Zealand Banking Group Ltd (ANZ) may raise its equity interests to controlling stake in four of the Asian banks it has stakes in, including Malaysia's AMMB Holdings Bhd as the group sees important investment opportunities for it to make the next leap in Asia Pacific. (Source: The Edge Financial Daily)

Sime: Zubir's lawsuits against directors, not Sime Darby. Sime Darby does not expect the two lawsuits, which are filed by Emirates International Energy Services and Sime Darby's group former CEO Datuk Seri Ahmad Zubir against the former and current directors, to have any significant impact on the group. (Source: The Edge Financial Daily)

Benalec: Secures RM37m contract. Benalec Holdings Bhds unit has accepted a letter of award from COMTRAC Sdn Bhd to undertake the proposed earthworks, river protection works and its associated works at Klang worth RM37m. The scope of works includes earthworks, reclamation works, ground treatment and protection works. (Source: Bursa Malaysia)

Kulim: Malay chamber prepared to buy over Kulim. The Malay Chamber of Commerce Malaysia (DPMM) says it is prepared to buy over Kulim (M) Bhd to keep the company's Bumiputera ownership. (Source: Business Times)

Autos: February vehicle sales flat. Total vehicle sales were flat last month, slipping a marginal 0.66% to 40,387 units from 40,654 units in the previous corresponding period. It is attributable to seasonal trends and a shorter working month. (Source: The Star)

Tech: Mclean gets nod to list on ACE market. Singapore-based Mclean Technologies Bhd, a precision cleaning and plastic injection moulding service provider, has received the nod to float its shares on the ACE market this year. (Source: The Sun)       

Azman: No plans to sell AMMB stake
AMMB Holdings' chairman and major shareholder Tan Sri Azman Hashim has denied rumors that he plans to sell his stake in the country's fifth largest banking group. Rumors had been rife that Azman, 71, who holds a 16.7% stake through his vehicle AmCorp Group, was looking to sell and that Australia and New Zealand Banking Group (ANZ) might be an interested buyer. ANZ is already a strategic shareholder in AMMB with a 23.8% stake. (BT)

Total vehicle sales down 0.7% to 40,387 units in February
Total vehicle sales in February declined by 0.7% to 40,387 units from the 40,654 units recorded in the same month last year, and was 26.0% lower than the previous month. The MAA said the short working month in February and a seasonal trend caused sales growth to slow. YTD, sales rose by 4.3% to 95,168 units compared with 91,276 units in the same period last year. (Bernama)

Salcon clinches 30-year concession for treatment plant
Salcon’s wholly owned subsidiary Salcon Changzhou (HK) Ltd has clinched a 30-year concession right for RMB60m from Changzhou City Tian Ning District Diao Zhuang Street Office of Jiangsu province in China to acquire, upgrade, operate and maintain a wastewater treatment plant on a transfer-operate-transfer basis in Changzhou. (Financial Daily)

Iris aborts JV to build biomass power plant
Iris Corp and WRP Asia Pacific have mutually terminated the JV agreement to develop, construct, operate and own a new biomass power plant, which had an estimated cost of RM135m, on a designated site owned or to be owned by WRP. The termination stemmed from reasons that WRP and the JV company were unable to conclude the leasing of the land to the JV company and the non-finalisation of the power purchase agreement between the JV company and WRP. (Financial Daily)

20110322 0933 Global Market Related News.

 Chart reading : correction range bound little downside biased.

 Chart reading : correction range bound downside biased.

 Chart reading : correction range bound downside biased.

 Chart reading : correction range bound downside biased.

Oil : Crude steady, draws support from spreading MidEast unrest
SINGAPORE, March 22 (Reuters) - U.S. crude oil futures were steady on Tuesday as supply concerns triggered by the spreading unrest in the Middle East supported prices, but uncertainty about demand from the world's No. 3 consumer Japan capped gains.
Oil prices rose 1 percent on Monday. Total crude trading volumes remained well below average, continuing last week's trend and underscoring the uncertainty facing the market and diminished open interest, brokers and analysts said.

COMMODITIES: Oil, gold up on Libya strikes; volumes thin
NEW YORK, March 21 (Reuters) - Oil and gold rose on Monday after a second wave of Western airstrikes on Libya but volumes in most commodities were thin, suggesting investors were getting wary of pushing prices higher on thinning news. "Essentially what we've got is geopolitical chaos but at the end of the day, the market is subject to headline risks and there's not a lot of new headline risk or headline shock out there," said Sean McGillivray, vice president and head of asset allocation at Great Pacific Wealth Management in Oregon. 

GLOBAL MARKETS: Asia stocks rise on Japan progress; yen softer
SINGAPORE, March 22 (Reuters) - Japanese stocks jumped nearly 4 percent on Tuesday amid reports of progress in containing radiation from an earthquake-damaged nuclear plant, and the yen was broadly softer on the possibility of further intervention by major central banks.
Shares elsewhere in Asia posted modest gains, after bouncing on Monday when Tokyo markets were closed for a holiday.

Japan to release 22-days of oil reserves-trade ministry
TOKYO, March 22 (Reuters) - Japan will allow the release of an additional 22 days worth of crude oil from privately held reserves, the trade ministry said.
The trade ministry had already allowed the release of 1.26 million kilolitres from reserves, or three days worth of demand, last week. 

Shell reports pipe leak at Deer Park, TX, refinery
BANGALORE, March 21 (Reuters) - Shell Oil Co  said Monday it discovered a leak on the overhead piping from the debenzenizer 2 at its 327,000 barrel-per-day (bpd) joint-venture refinery in Deer Park, Texas, according to a filing with state regulators.
Debenzenizer 2 column was shut. Once the feed and heat were removed, the pipeline was purged with natural gas, the filing said.

Asian Stocks Gain as Japan Makes Progress on Nuclear Crisis; Honda Rises (Source: Bloomberg)
Asian stocks rose for a third day as Japan made progress in stabilizing reactors at a crippled nuclear plant.

Japan Economy V-Shaped Rebound Depends on End to Blackouts - Goldman Sachs Economist Michael Buchanan (Source: Bloomberg)
Japan is likely to see a rebound in the second half of this year after a blow that will be determined by the magnitude of electricity disruptions caused by the earthquake and tsunami, a survey of economists showed.

Existing Home Sales in U.S. Slump; Prices Drop to Lowest Since April 2002 (Source: Bloomberg)
Sales of previously owned U.S. homes dropped more than forecast in February, sending prices to the lowest level since 2002 and indicating the market is struggling to recover.

Fed Will Release Bank Loan Data as Top Court Rejects Appeal (Source: Bloomberg)
The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.

ECB Signals Japan's Earthquake Won't Deter It From Raising Rates in April (Source: Bloomberg)
European Central Bank officials indicated the economic uncertainty caused by Japan’s earthquake may not deter them from raising interest rates next month.

Yen Weakens for a Third Day as Nuclear Crisis Eases, Asian Stocks Advance (Source: Bloomberg)
The yen traded 0.3 percent from a two-week low against the euro as Asian stocks rose and progress by Japan’s government in restoring a crippled nuclear plant’s cooling systems sapped demand for the currency as a refuge.

Buffett Won’t Sell Japan Shares as Earthquake Creates ‘Buying Opportunity’ (Source: Bloomberg)
Warren Buffett, whose Berkshire Hathaway Inc. (BRK/A) has a bullish derivative bet on Japan’s benchmark stock index, said the country’s record earthquake created a buying opportunity for equity investors.

Corn (Source: CME)
US corn futures end mixed after wild swings last week as chatter about sales to China lost its luster without confirmation from the government. The USDA says exporters struck deals to sell 116,000 tons of corn to unknown destinations, leaving questions about demand from China unanswered. Futures surged late last week on talk China had made significant purchases. "We've been unable to confirm anything in the world markets as far as China buying corn," says Tom Leffler, owner of Leffler Commodities. CBOT May corn rises 0.4% to $6.86 1/2 a bushel.

Wheat (Source: CME)
US wheat futures finish mixed amid light profit-taking following a 4% rally last week. Market participants are waiting for confirmation of how Japan's disasters will impact its demand for grains. Many expect the major importer will increase purchases, particularly of spring wheat traded at MGEX, following a temporary slowdown. Weekly US wheat export inspections of 25.7M bushels were within expectations. CBOT May wheat slips 2c to $7.21/bushel while KCBT May dips 3c to $8.42 and MGEX May edges up 1 3/4c to $8.69 1/4.

Oats (Source: CME)
Oat futures weakened on profit-taking following last week�s advances. Oats for May delivery dropped 2 cents, or 0.6%, to $3.50 a bushel

Prices May Rise On China Corn Demand (Source: CME)
Asia's grain prices are likely to extend gains on technical buying as concerns about weak Japanese demand ebb and amid speculation over Chinese demand for corn. Traders said China may have purchased several cargoes of U.S. corn last week totaling more than 600,000 metric tons when prices fell sharply but the deals couldn't be confirmed immediately. "At least one major Chinese buyer is said to have been very active last week in (corn) purchases for shipment between July and October," said a person familiar with the developments. Last Thursday, the U.S. Department of Agriculture reported that private exporters struck deals to sell 116,000 tons of corn for delivery to unknown destinations during the 2010-11 marketing year. Traders said the sales may have been to buyers in China. The person said actual sales to China may turn out to be much higher but the grain will mostly be shipped in the next marketing year, which begins Sept. 1.
If sales are made on a free-on-board basis, U.S. exporters aren't obliged to disclose the destination until the vessel for shipment is designated. Even in the absence of Chinese demand, inventories of U.S. corn are projected to hit a 15-year low by the end of August. Any imports by China can deplete stocks further and more than offset any slowdown in purchases by Japan, said a Washington-based industry analyst. Japan is the world's largest corn importer while the U.S. is the largest exporter. China imported 1.6 million tons corn last year, its largest purchase in several years, but imports can potentially increase manifold in future as demand for pork increases. Corn is primarily used as animal feed. Traders point out that higher corn prices can push up wheat prices as well. Wheat's premium to corn on the Chicago Board of Trade fell to its lowest in a decade last week to less than 32 cents.
Earlier this year, China purchased at least 500,000 tons of Australian wheat, around 125,000 tons of it food-grade wheat. Traders expect the most active corn, wheat and soybeans May futures contracts on CBOT to test $7.0 a bushel, $7.50 and $13.80 respectively this week. The contracts are currently trading around $6.89, $7.23 and $13.66. However, higher grain prices may slow down Asian physical buying this week. The recent downward correction spurred a heavy buying spree across north and southeast Asia from South Korea to Indonesia and Vietnam to the Philippines. Buyers in the region locked in supply of more than 1.1 million tons of grains and oilmeals last week. South Korea's feed and flour millers alone purchased at least 705,000 tons of grains and oilmeals, making the country one of the world's largest grain buyers last week. Australia sold 200,000 tons of wheat in the week to Friday, including a cargo to quake-hit Japan.

China 2011 Agriculture Spending To Top CNY858 Bln - State TV (Source: CME)
The Chinese government plans to invest more than CNY857.97 billion this year in its agricultural sector, state television reported. The spending plan would represent an increase of about 5% over the spending in 2010.

Argentina Suspends More Grain Exporters (Source: CME)
Argentina's tax agency on broadened a crackdown on alleged tax evasion by multinational grain exporters, suspending three more companies from a key registry. Afip said it has suspended Louis Dreyfus, Bunge Argentina and Oleaginosa Moreno from the registry for evading taxes by triangulating their grain trading operations through other countries, among other measures. Exclusion from the registry will cause the income tax withheld on domestic grain trades to rise to 15% from 2% and the imposition of a 10.5% sales tax. The companies firms will also have limits imposed on the number of permits they can obtain from Afip for domestic shipping. Representatives of the three companies declined to comment, but international grain exporters complain that they are being singled out by Afip. Earlier this month, Afip suspended units of Cargill Inc., Archer Daniels Midland Corp. and Toepfer International from the registry for similar reasons.
Afip agents also raided 117 offices of 48 different exporters on the suspicion that they had created phantom companies to hide grain sales. The companies denied any wrongdoing. The government of President Cristina Fernandez has turned up the heat on grain exporters, who the administration says have evaded hundreds of millions of dollars in taxes in recent years. Last year, Afip accused four of the country's 10 largest grain exporters of using shell companies in neighboring Uruguay for accounting purposes that left minimal profits on the books of their Argentine units. At the time, Bunge issued a blunt statement saying the government had pressured the grain exporters to make advanced income tax payments for 2011 or face "serious problems for the companies and their directors." Agriculture exports were largely responsible for Argentina's $12.06 billion trade surplus last year, while taxes on farm exports accounted for a significant percentage of the federal government's tax revenue.
Argentina is the world leader in soymeal and soyoil exports, ranks No. 2 in corn exports, and third in soybeans.

World Bank says East Asia must tighten policy, downplays Japan risk
BEIJING/SINGAPORE, March 21 (Reuters) - Inflation remains a major challenge and tighter monetary policies are needed across East Asia, the World Bank said on Monday, as it downplayed risks to regional growth from the devastating earthquake in Japan.
In a semi-annual East Asia and Pacific Economic Update, the World Bank nudged up its 2011 growth forecasts, but said the big picture was that the fight against inflation would weigh on economies from China to Malaysia.

Supply concerns grow as Japan lacks parts, power
MADRID/PARIS, March 18 (Reuters) - From Apple Inc's  new iPad to Chevrolet pick-ups, concern is spreading down the global manufacturing supply chain about the impact of Japan's earthquake last week.
Plant shutdowns across Japan following the earthquake, tsunami and nuclear crisis threaten supplies of everything from semiconductors to car parts for manufacturers across the globe.

China remains focused on inflation -Vice Premier Li
BEIJING, March 20 (Reuters) - China will stay focused on stifling inflation even as global economic uncertainties multiply, Chinese Vice Premier Li Keqiang said on Sunday.
"We will make stabilising the overall level of prices the primary task of macro-economic adjustment," said Li, who is likely to succeed Wen Jiabao as premier two years from now.

PRECIOUS-Gold rises as Japan, Mideast worries persist
LONDON, March 21 (Reuters) - Gold rose for a fourth day on Monday, driven by concern over the impact to global growth from the devastation in Japan, while western air attacks on Libya added to investor uncertainty.
"It's happening against a backdrop of elevated uncertainty from numerous places, which should give these safe-haven type commodities a bid," said Saxo Bank senior manager Ole Hansen.

FOREX-Yen slips on intervention risk; volatility falls
LONDON, March 21 (Reuters) - The yen fell back towards its post-intervention lows on Monday, with speculators wary of pushing it higher against the dollar in case of more coordinated selling of the Japanese currency by the Group of Seven nations.
"Dollar/yen will be supported in the near term with the market wary of more intervention," said Hans Redeker, chief fx strategist at BNP Paribas.

GRAINS-Exports, crop outlook lift corn, wheat; soy chart turn bullish
BEIJING, March 21 (Reuters) - Wheat and corn prices rallied around 1 percent tracking a surge in oil prices, and soybean futures may also resume their upward trend on positive technical and crop signals.  "The trade in grains is pretty choppy. We had some strong rallies late last week after a big sell-off," said Victor Thianpiriya, agricultural commodity analyst at ANZ in Melbourne.

US corn end-stocks in focus on China purchase talk
CHICAGO, March 18 (Reuters) - China, rumored to have bought a large quantity of U.S. corn this week, can book up to 700,000 tonnes of old-crop supplies without further tightening ending stocks, forecast at 15-year lows, analysts said.
U.S. ending stocks would be able to bear an even larger purchase of old-crop corn by China because feed use by the U.S. livestock industry could decline and exports to Japan could be lower following the earthquake that devastated the country.

Mexico 10/11 corn output seen at 21.5 mln tonnes-attache
WASHINGTON, March 18 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Mexico: "Cold weather in early February damaged large areas planted to corn, wheat, and dry beans. The production estimates for marketing year 2010/11 are 21.5 million tonnes corn, 7.1 million tonnes sorghum, 3.65 million tonnes wheat, 150,000 tonnes rice (milled basis) and 1 million tonnes dry beans.

Informa raises US 2011 corn area f'cast, cuts soy
CHICAGO, March 18 (Reuters) - Analytical firm Informa Economics projected that U.S. farmers will plant 75.269 million acres (30.46 million hectares) of soybeans this spring, a drop from its January estimate of 76.654 million, trade sources said Friday.
The firm raised its estimate of 2011 U.S. corn plantings to 91.758 million acres (37.13 million hectares), which was up from 90.9 million in January -- but below the U.S. Department of Agriculture's preliminary forecast of 92 million.

Libya ceasefire prompts stock rally, G7 caps yen
NEW YORK, March 18 (Reuters) - Global stocks rose on Friday as traders took on riskier investments following a Libya ceasefire that reduced tension in the region, and after several central banks intervened to stabilize the yen.
Trading capped a week of extreme volatility marked by Wall Street's gauge of anxiety, the VIX, which on Thursday soared to its highest level since July. Stock market volumes surged on down days and fell on up days.

WHO warns of "serious" food radiation in disaster-hit Japan
TOKYO, March 21 (Reuters) - The World Health Organisation said on Monday that radiation in food after an earthquake damaged a Japanese nuclear plant was a "serious situation", eclipsing clear signs of progress in a battle to avert a catastrophic meltdown in the reactors.
Engineers managed to rig power cables to all six reactors at the Fukushima complex, 240 km (150 miles) north of Tokyo, and started a water pump at one of them to reverse the overheating that has triggered the world's worst nuclear crisis in 25 years.

20110322 0922 Soy Oil & Palm Oil Related News.

 Soy Oil chart reading : side way range bound little downside biased.

Reuters: Indonesia to set Apr 2011 Palm Oil export tax at 22.5%.

Soybeans (Source: CME)
US soybeans ends higher after trading in both positive and negative territory during the session. Futures were torn between traders booking profits following sharp advances late last week and support from underlying fundamentals. Investors were initially cautious of pushing prices in the absence of fresh supportive news, says Tim Hannagan of PFG Best. New-crop soybeans led the gains, with lower-than-expected private planted-acreage forecasts serving as the catalyst. Traders added risk premium to new-crop contracts as insufficient increases in acreage will require higher-than-normal crop yields come summer if more tight supply is to be avoided. CBOT May soybeans settled up 1/2c at $13.63/bushel while November climbed 11c to $13.45.

Soybean Meal/Oil (Source: CME)
US soy product futures finish mixed, with soyoil climbing on support from higher crude oil futures prices, analysts say. Crude oil influences soyoil due to its use in making renewable fuels. Soymeal futures drifted lower, succumbing to pressure from adjustments in the soymeal/soyoil spread relationship, traders said. CBOT May soyoil up 0.2% at 55.88c per pound, and May soymeal slips 0.4% to $366.40 per short ton.

China Minister: Drafting Measures To For Vegoil Self-sufficiency (Source: CME)
China is drafting measures to increase its domestic output of oilseeds including soybean, peanut and rapeseed by 2015, in an effort to maintain its self-sufficiency of edible oil supply, the Hong Kong-based Phoenix Satellite Television reported over the weekend. The government aims to keep self-sufficiency of edible oils at current 40%, Chinese Agricultural Minister Han Changfu said in the report.

Palm off ten-day highs as export slowdown weighs
KUALA LUMPUR, March 21 (Reuters) - Malaysia's palm oil futures ended off a ten-day high on lower exports, underscoring fears that the global economy will slow with this month's earthquake and tsunami hitting Japan.
Losses were limited as some traders picked up bargains after Japanese authorities took a major step in managing a nuclear crisis by connecting all six earthquake-damaged reactors to power supply.

Brazil soy belt dries out, more rains en route
SAO PAULO, March 18 (Reuters) - Rains finally eased over Brazil's soy belt that was in the midst of a record harvest, after early March downpours delayed or flooded some important growing regions.
But an extended outlook beyond next week forecast heavy rains returning to the the growing regions that are entering into the peak of harvest, meteorologists Somar said Friday.